VisionMobile: One-third of developers lose money on apps

Although mobile application developers are in hot demand right now, a new survey by research firm VisionMobile found that about one-third of the more than 900 mobile developers around the world they surveyed said that they make less than $1,000 per application. And given the fact that most apps take more than a month to develop, many developers are losing money at their endeavor.  

The firm, which released these findings as part of its annual 2011 Developer Economics report, also looked closely at the various operating systems that developers are using for their apps.  VisionMobile found that 67 percent of developers are using Google's (NASDAQ:GOOG) Android platform, while 59 percent are using Apple's (NASDAQ:AAPL) iOS platform.

In addition, the report said that while Microsoft's (NASDAQ:MSFT) Windows Mobile OS is not yet the "third horse" in this three-horse race because it is not yet considered a commercially viable platform, 32 percent of developers say they plan to use the Microsoft platform in the future.

But not all platforms have equal revenue-generating potential. Interestingly, when VisionMobile compared per-application revenues reported by developers for different platforms, Symbian scored the lowest (thus the firm assigned it a base value of 1.0 to its reported per-app revenue and rated other platforms relative to this revenue index).  Apple's iOS topped the chart, making 3.3 times more money per app than Symbian.  Research in Motion's (NASDAQ:RIMM) BlackBerry OS scored a 2.4 on the index and Google's Android scored 1.7.

VisionMobile noted that device sales don't necessarily translate into higher application revenue, adding that Symbian still has the highest share of smartphone penetration.  

Nevertheless, 50 percent of mobile developers said that they tend to select their operating system platforms based upon that platform's reach, while about 25 percent said they selected the platform based upon that platform's ability to make money.

But making money from an application is about much more than reach. VisionMobile said that app stores are the primary distribution channel for mobile developers, with 45 percent of those surveyed saying that they are using app stores for distribution. Other distribution channels, such as websites, telco portals, aggregators and preloaded apps are on the decline.

Developers, meanwhile, make money primarily through the pay-per-download model, followed by advertising and freemium (free to download, pay to upgrade).  Although subscriptions and in-app purchases are gaining momentum, they are still three times less popular with developers than the pay-per-download model.

Click here to see a slideshow of charts from the report

For more:
-see this web site to download the report

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